Are you a CIS registered subcontractor and not VAT registered? If so, you could be losing out on thousands in VAT reclaims from HMRC!
Changes to the CIS Domestic Reverse Charge
Since 1st March 2021 the Domestic Reverse Charge on CIS services has been in force, this applies to CIS registered subcontractors who are also VAT Registered.
In a brief summary, if a subcontractor provides CIS services to a contractor who is also VAT registered then the subcontractor must Zero rate the VAT on their sales and the contractor would reverse charge this on their VAT Returns.
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How Does The CIS Domestic Reverse Charge Impact You?
What happens next is that the subcontractor can claim VAT on their business expenses, whilst not paying any VAT on their sales, resulting in a refund of VAT every quarter!
So, if you are a subcontractor only providing CIS services to VAT registered contractors, then you may want to register for VAT ASAP.
For a full breakdown of the scheme, please see the HMRC Government website on https://www.gov.uk/guidance/vat-domestic-reverse-charge-for-building-and-construction-services
If you are unsure what these changes mean to you and your business, then contact us today at email@example.com or call us on 01237 478246 for a free, no obligations call with experienced and qualified chartered accountants.
We offer a full digital accountancy and bookkeeping service to the whole of the UK (excluding Northern Ireland), however, our key local services areas are Bideford, Barnstaple, Torrington, South Molton and the surrounding areas.